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B2B Sales Hacks

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Anthony Brown
Anthony Brown

This document provides an overview of B2B sales methodology, CRM, pipelines, and key metrics. It discusses how CRM aims to maintain customer records but has not fully solved executive and sales challenges. The document outlines different stages for designing a sales funnel and pipeline, as well as automation tools that can enhance the pipeline. Key sales metrics covered include cost per lead, average opportunity size, pipeline velocity, weighted opportunities, customer acquisition cost, conversion rates, retention rates, customer lifetime value, and net promoter score.

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B2B SALES HACKS Methods and Metrics
This deck is a continuation of the CRM and Customer Experience Management presentation focusing more specifically on B2B sales methodology, pipeline and metrics.
CRM: DEFINITION WHAT IT IS CRM is a practice of using technology to maintain a system of record at the customer level, and perform business transactions or updates to this record based on the customer's relationship with a company. WHAT IT ISN’T An application that manages customer relationships, specifically.
CRM: VENDORS WHICH VENDORS OCCUPY THE SPACE? The CRM industry is highly fragmented across industry, vertical and scenarios. Many CRM vendors such as PipeDrive, Highrise, and streak are among thousands who occupy 54% of the market. Microsoft 7% Oracle 10% SAP 13% Salesforce 16% Other 54% US CRM MARKET SHARE BY VENDOR Source: Gartner
CRM: MARKET INDUSTRY GROWTH (CRM, ERP) 0 10 20 30 40 2010 2011 2012 2013 2014 2015 2016 2017 CRM ERP WHAT IS THE GROWTH OPPORTUNITY IN CRM? The US CRM industry is forecasted at 56% CAGR through 2017 and will outpace ERP technologies in the enterprise. Source: Gartner
SALES: MGMT CHALLENGES WHAT HAS CRM NOT SOLVED FOR EXECUTIVES? Despite tools and processes, commercial goals are elusive and executives are actively looking for solutions. Source: Qvidian 0 25 50 75 100 75 8283 87 94 Increase Win Rate Improve Quota Attainment Increase Deal Size Visibility into Productivity Shorten Sales Cycle
SALES: REP CHALLENGES WHAT HAS CRM NOT SOLVED FOR SALES PROS? Source: Qvidian 0 25 50 75 100 2020 25 46 58 New Accounts Account Penetration Sales Perf. Optimize Deal Size Improve Customer Loyalty Despite tools and processes, individual goals are elusive and sales professionals are actively looking for ways to meet targets.
SALES METHODOLOGY C B A WHAT SHOULD I KNOW ABOUT MY PIPELINE? 1. Stage metrics 2. Opportunity and Activity metrics 3. Customer Metrics
PIPELINE METHODOLOGY Done Doing To-Do HOW DO I DESIGN MY SALES FUNNEL STAGES? Sales funnels are one way to look at a pipeline of a company or an individual, and can vary based on the sophistication of your organization and needs.
PIPELINE METHODOLOGY Close Solution Lead As sophistication increases, so do the number of stages, which are attributed to a percentage of qualification. Qualification HOW DO I DESIGN MY SALES FUNNEL STAGES?
PIPELINE METHODOLOGY Closed Solution Lead With each sales stage, stakeholders may want to measure correlations, such as lead time, sales stage costs, etc. Needs Analysis Validation HOW DO I DESIGN MY SALES FUNNEL STAGES?
PIPE INFRASTRUCTURE Automation Tools There are many tools that exist as CRM add-ons or stand-alone to enhance sales stage abilities. Campaign Monitor mention.net tower data, clear bit, full contact, reparative outreach, tout, growbots mport.io, python scripts on github, outwit, nerdy data proleads.io, datadyze, data.com Harvesting Qualification Outbound Source: 500 Startups
SALES CYCLE The process that companies undergo when selling a product to a customer. It encompasses all activities associated with closing sale. Many companies have different steps and activities in their sales cycle, depending on how they define it. Step 1 Step 2 Step 3 Step 4 Step 5 PIPELINE METHODOLOGY
SALES METRICS COST PER LEAD/ACTION Or CPL, or CPA, referring to lead generation and the cost associated with making a conversion, regardless if the customer is new or returning. Formula: CPL = marketing spend / New Orders $inthousands $0 $300 $600 $900 $1,200 Outbound Inbound Out-of-Home Trade Show 18 7 22 45 600 200 300 995 In the above graph, I am demonstrating that ‘marketing spend’ spans multiple categories, each that have gained new orders. The sum of marketing spend ($2,095), divided by new orders (97), provides the cost-per-lead ($21,957).
AVERGE OPPORTUNITY SIZE Refers to a group of opportunities in a pipeline defined by their revenue average. This metric is used to understand the health of a sales persons opportunities compared to a pipeline. SALES METRICS Formula: avg opty size = $ total pipeline / # opportunities The sales funnel above illustrates several opportunities in the pipeline, regardless of percentage qualified whose sum ($3,000,000), divided by the quantity (4) yield an average opportunity size of ($750,000). $1,000,000 $900,000 $700,000 $400,000
PIPE VELOCITY Sales, opportunity or pipeline velocity refers to the rate of time that it takes for a deal to move from zero to close. Sales velocity can be increased by any of the following: • Number of Leads, • Win Rate %, • Average Deal Size • decreasing your Average Sales Cycle ACTIVITY METRICS Formula: pipeline velocity = [(# of qualified opportunities)(Win Rate %) (avg. deal size)] / avg sales cycle $25k $100k $250k $75k $100k $200k $175k $300k The above chart demonstrates a pipeline velocity benchmark of 5. This occurs by counting the quantity of opportunities (8), multiplied by win rate in green (50%), multiplied by the average deal ($153k), divided by (120 days). Avg Days by Stage 20 10 15 30 45
WEIGHTED OPPORTUNITY & PIPELINE Measures the uncertainty of sales opportunities for the purpose of forecasting sales and revenue by percentage of sales stage qualification. SALES METRICS Formula: opportunity weight = ($ by sales stage) ( sales stage qualification %) $25k $100k $250k $75k$100k $200k $175k $300k Using the previous chart with $1,225,000 in opportunity, we get a weighted pipeline of ($650*10%) + ($100k*20%) + ($375k*40%) + ($25k*60%) + ($75k*80%), or $310,000, which is the revenue volume expected to close or that we would forecast in this pipeline. 10% 20% 40% 60% 80%
CUSTOMER ACQUISITION COST The cost associated in convincing a new customer to buy a product/service. Do not get this metric confused with cost per lead as there is a strong distinction between the two. CUSTOMER METRICS Formula: CAC = Time period (total costs of acquisition / total new customers) July DM CAC $ $0 $15 $30 $45 $60 Channel SEO Yellow Pages Display Email 60 50 20 9 The above graph shows costs per acquisition across multiple direct marketing channels.
CONVERSION RATE The conversion rate is the percentage of users who take a desired action. The archetypical example of conversion rate is the percentage of website visitors who buy something on the site. CUSTOMER METRICS Formula: conversion = converts / total leads Not Desired Buy Add to Cart Clicks Views Sign in Buy Add to Cart Clicks Views Guest Check out Optimized
RETENTION RATE AND CHURN The ratio of the number of retained customers to the number at risk. By contrast, churn is the rate of users who drop-off from a funnel or subscription. CUSTOMER METRICS Formula: retention rate = ((# customers at end of period - # new customers added in period)/# customers at start of period)) X 100 Cohort A: Acquired 600 customers, 95% retention rate, lost 5% (30) Cohort B: Acquired 600 customers, 80% retention rate, lost 20% (120) Retention vs Churn 0 150 300 450 600 Jan Feb Mar Apr May June Jul Cohort A Cohort B
CUSTOMER METRICS CUSTOMER LIFETIME VALUE The present value of the future cash flows attributed to the customer during his/her entire relationship with the company. Formula: CLV($) = Margin ($) * (Retention Rate (%) / [1 + Discount Rate (%) - Retention Rate (%)]) $ -100 -75 -50 -25 0 25 50 75 100 Months 1 2 3 4 5 6 7 8 75 50 25 -25-50-75-100
NET PROMOTOR SCORE An index ranging from -100 to 100 that measures the willingness of customers to recommend a company's products or services to others. It is used as a proxy for gauging the customer's overall satisfaction with a company's product or service and the customer's loyalty to the brand. CUSTOMER METRICS
THANK YOU. 88 awbrown

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B2B Sales Hacks

  • 2. This deck is a continuation of the CRM and Customer Experience Management presentation focusing more specifically on B2B sales methodology, pipeline and metrics.
  • 3. CRM: DEFINITION WHAT IT IS CRM is a practice of using technology to maintain a system of record at the customer level, and perform business transactions or updates to this record based on the customer's relationship with a company. WHAT IT ISN’T An application that manages customer relationships, specifically.
  • 4. CRM: VENDORS WHICH VENDORS OCCUPY THE SPACE? The CRM industry is highly fragmented across industry, vertical and scenarios. Many CRM vendors such as PipeDrive, Highrise, and streak are among thousands who occupy 54% of the market. Microsoft 7% Oracle 10% SAP 13% Salesforce 16% Other 54% US CRM MARKET SHARE BY VENDOR Source: Gartner
  • 5. CRM: MARKET INDUSTRY GROWTH (CRM, ERP) 0 10 20 30 40 2010 2011 2012 2013 2014 2015 2016 2017 CRM ERP WHAT IS THE GROWTH OPPORTUNITY IN CRM? The US CRM industry is forecasted at 56% CAGR through 2017 and will outpace ERP technologies in the enterprise. Source: Gartner
  • 6. SALES: MGMT CHALLENGES WHAT HAS CRM NOT SOLVED FOR EXECUTIVES? Despite tools and processes, commercial goals are elusive and executives are actively looking for solutions. Source: Qvidian 0 25 50 75 100 75 8283 87 94 Increase Win Rate Improve Quota Attainment Increase Deal Size Visibility into Productivity Shorten Sales Cycle
  • 7. SALES: REP CHALLENGES WHAT HAS CRM NOT SOLVED FOR SALES PROS? Source: Qvidian 0 25 50 75 100 2020 25 46 58 New Accounts Account Penetration Sales Perf. Optimize Deal Size Improve Customer Loyalty Despite tools and processes, individual goals are elusive and sales professionals are actively looking for ways to meet targets.
  • 8. SALES METHODOLOGY C B A WHAT SHOULD I KNOW ABOUT MY PIPELINE? 1. Stage metrics 2. Opportunity and Activity metrics 3. Customer Metrics
  • 9. PIPELINE METHODOLOGY Done Doing To-Do HOW DO I DESIGN MY SALES FUNNEL STAGES? Sales funnels are one way to look at a pipeline of a company or an individual, and can vary based on the sophistication of your organization and needs.
  • 10. PIPELINE METHODOLOGY Close Solution Lead As sophistication increases, so do the number of stages, which are attributed to a percentage of qualification. Qualification HOW DO I DESIGN MY SALES FUNNEL STAGES?
  • 11. PIPELINE METHODOLOGY Closed Solution Lead With each sales stage, stakeholders may want to measure correlations, such as lead time, sales stage costs, etc. Needs Analysis Validation HOW DO I DESIGN MY SALES FUNNEL STAGES?
  • 12. PIPE INFRASTRUCTURE Automation Tools There are many tools that exist as CRM add-ons or stand-alone to enhance sales stage abilities. Campaign Monitor mention.net tower data, clear bit, full contact, reparative outreach, tout, growbots mport.io, python scripts on github, outwit, nerdy data proleads.io, datadyze, data.com Harvesting Qualification Outbound Source: 500 Startups
  • 13. SALES CYCLE The process that companies undergo when selling a product to a customer. It encompasses all activities associated with closing sale. Many companies have different steps and activities in their sales cycle, depending on how they define it. Step 1 Step 2 Step 3 Step 4 Step 5 PIPELINE METHODOLOGY
  • 14. SALES METRICS COST PER LEAD/ACTION Or CPL, or CPA, referring to lead generation and the cost associated with making a conversion, regardless if the customer is new or returning. Formula: CPL = marketing spend / New Orders $inthousands $0 $300 $600 $900 $1,200 Outbound Inbound Out-of-Home Trade Show 18 7 22 45 600 200 300 995 In the above graph, I am demonstrating that ‘marketing spend’ spans multiple categories, each that have gained new orders. The sum of marketing spend ($2,095), divided by new orders (97), provides the cost-per-lead ($21,957).
  • 15. AVERGE OPPORTUNITY SIZE Refers to a group of opportunities in a pipeline defined by their revenue average. This metric is used to understand the health of a sales persons opportunities compared to a pipeline. SALES METRICS Formula: avg opty size = $ total pipeline / # opportunities The sales funnel above illustrates several opportunities in the pipeline, regardless of percentage qualified whose sum ($3,000,000), divided by the quantity (4) yield an average opportunity size of ($750,000). $1,000,000 $900,000 $700,000 $400,000
  • 16. PIPE VELOCITY Sales, opportunity or pipeline velocity refers to the rate of time that it takes for a deal to move from zero to close. Sales velocity can be increased by any of the following: • Number of Leads, • Win Rate %, • Average Deal Size • decreasing your Average Sales Cycle ACTIVITY METRICS Formula: pipeline velocity = [(# of qualified opportunities)(Win Rate %) (avg. deal size)] / avg sales cycle $25k $100k $250k $75k $100k $200k $175k $300k The above chart demonstrates a pipeline velocity benchmark of 5. This occurs by counting the quantity of opportunities (8), multiplied by win rate in green (50%), multiplied by the average deal ($153k), divided by (120 days). Avg Days by Stage 20 10 15 30 45
  • 17. WEIGHTED OPPORTUNITY & PIPELINE Measures the uncertainty of sales opportunities for the purpose of forecasting sales and revenue by percentage of sales stage qualification. SALES METRICS Formula: opportunity weight = ($ by sales stage) ( sales stage qualification %) $25k $100k $250k $75k$100k $200k $175k $300k Using the previous chart with $1,225,000 in opportunity, we get a weighted pipeline of ($650*10%) + ($100k*20%) + ($375k*40%) + ($25k*60%) + ($75k*80%), or $310,000, which is the revenue volume expected to close or that we would forecast in this pipeline. 10% 20% 40% 60% 80%
  • 18. CUSTOMER ACQUISITION COST The cost associated in convincing a new customer to buy a product/service. Do not get this metric confused with cost per lead as there is a strong distinction between the two. CUSTOMER METRICS Formula: CAC = Time period (total costs of acquisition / total new customers) July DM CAC $ $0 $15 $30 $45 $60 Channel SEO Yellow Pages Display Email 60 50 20 9 The above graph shows costs per acquisition across multiple direct marketing channels.
  • 19. CONVERSION RATE The conversion rate is the percentage of users who take a desired action. The archetypical example of conversion rate is the percentage of website visitors who buy something on the site. CUSTOMER METRICS Formula: conversion = converts / total leads Not Desired Buy Add to Cart Clicks Views Sign in Buy Add to Cart Clicks Views Guest Check out Optimized
  • 20. RETENTION RATE AND CHURN The ratio of the number of retained customers to the number at risk. By contrast, churn is the rate of users who drop-off from a funnel or subscription. CUSTOMER METRICS Formula: retention rate = ((# customers at end of period - # new customers added in period)/# customers at start of period)) X 100 Cohort A: Acquired 600 customers, 95% retention rate, lost 5% (30) Cohort B: Acquired 600 customers, 80% retention rate, lost 20% (120) Retention vs Churn 0 150 300 450 600 Jan Feb Mar Apr May June Jul Cohort A Cohort B
  • 21. CUSTOMER METRICS CUSTOMER LIFETIME VALUE The present value of the future cash flows attributed to the customer during his/her entire relationship with the company. Formula: CLV($) = Margin ($) * (Retention Rate (%) / [1 + Discount Rate (%) - Retention Rate (%)]) $ -100 -75 -50 -25 0 25 50 75 100 Months 1 2 3 4 5 6 7 8 75 50 25 -25-50-75-100
  • 22. NET PROMOTOR SCORE An index ranging from -100 to 100 that measures the willingness of customers to recommend a company's products or services to others. It is used as a proxy for gauging the customer's overall satisfaction with a company's product or service and the customer's loyalty to the brand. CUSTOMER METRICS